MADURAI MOSAIC INDUSTRIES THROUGH ITS PARTNER G. RAMAKRISHNAN Vs. THE REGIONAL DIRECTOR, THE REGIONAL OFFICE, TAMIL NADU STATE INSURANCE CORPORATION AND ANR.

JUDGEMENT

(1.) THE interesting point of law arising in this appeal is whether Section 2(12) of the Employees' State Insurance Act (XXXIV of 1948) is to be in consonance with the preamble of the said Act or is it that Section 2(12) of the Act has to be interpreted in the strict sense of the rules of interpretation so as to saddle the responsibility of paying the contribution contemplated for the benefit of the employees in the factory.

(2.) THE factory in question is a partnership concern dealing in mosaic industries known as 'Madurai Mosaic Industries'. According to the petitioner and which is also admitted by the respondents that action had been taken for the period commencing from 28th August, 1967 to 11th May, 1972 during which time, it is submitted by the respondents that the concern in question, namely, the partnership firm, though it is represented by G. Ramakrishnan, one of the partners, the said partnership consisted of two partners, that they are to come under the definition of Section 2(12) of Act, in that, though they are partners, yet inasmuch as they do receive remuneration, one, to the tune of Rs. 250 and the other to the tune of Rs. 150 as evidenced by the contents of Exhibit A -1, they should be considered only as employees, and as such they should also included as individuals doing work in the precincts of the factory so as to get the benefits of the Act and in doing so, to see whether it exceeds the number 20 or not, it is but necessary that all the heads also should be counted so as to saddle the responsibility of the contribution by the partnership firm towards the benefit of the scheme contemplated by the Act XXXIV of 1948. In this regard, it is but necessary that we have to evince interest in the ingredients of the definition Section 2 with special reference to Clauses (9) and (12) which read as follows:

(3.) IT was averred that the first respondent, namely the Regional Director, the Regional Office, Tamil Nadu State Insurance Corporation, Madras -34, has included the appellant herein and the other partner, Muthukrishnan as workers wrongly to make up the figures, which in the circumstances, is not correct. Reiterating the above position, Mr. Chidambaram, the learned Counsel for the appellant herein states that the decision arrived at by the lower Court is not in consonance with the concept that is actually contemplated under Clause (9) of Section 2 of the Act together with the observations made by the Supreme Court in Commissioner of Income Tax v. R.C. Chidambaram Pillai : [1977] 10 ITR 292(SC). In this regard, paragraphs 5 to 15 of the judgment of the Supreme Court referred to above is pointed out and read to the benefit of this Court by Mr. Chidambaram. As a matter of fact, much stress has been laid by Mr. Chidambaram that the introduction of the word "employees" as per Section 2(12) of the Act should be so construed in consonance with the observations made in Lindley on Partnership, Fourteenth Edition, the observation in which has been extracted in extenso by the Supreme Court and it is submitted that in turn this Court is bound to follow the said concept while applying the ingredients of Section 2(12) of the Act. In this regard Mr. Chidambaram also contends that the approach to Section 2(9) cannot be in a different manner than the approach to which this Court has to resort while interpreting Section 2(12) of the Act. In other words, the substance of his argument can be couched in one single sentence and that is this, namely, a partner cannot be an employee of the partnership and as such whatever might be there on record by way of documentary evidence -perhaps what he refers to is the contents of Exhibit A -1, the approach should be to exclude the partner while computing the number of workers actually employed in the precincts of the factory. I do find that the argument is very interesting and attractive; but the same cannot be upheld.